Within an economic context, the concept of growth is extremely important. Extensive Growth is that which arises from adding new factors of production: be they workers, machines, or factories. This kind of growth is driven by capital accumulation or labour accumulation and exists in contrast to intensive growth, which occurs when existing factors are used more efficiently. An example of this is taking a bunch of separate machines and making them into an assembly line. No new machines are added, but the existing machines yield a higher output than before.

Growth can be charted using the Cobb-Douglass Production Function:

Y (Income) = T (Technology) * L (Labour) ^ (a) * K (Capital) ^ b where a+b=1

ln(Y) = ln(T) + a ln(L) + b ln(K)

Having a and b sum to one creates constant returns to scale within the model. In all developed economies, a is around .75 and b is around .25. Since income is allocated to factors according to their marginal contributions, it makes sense that 75% of national income (GDP) is directed to labour.

Within this model, changes in L and K represent extensive growth while changes in T represent intensive growth. In Canada, about 17% of GDP growth is attributable to changes in L, 13% to changes in K, and the remainder to changes in T.